Asian markets slip on slowing earnings growth and Ukraine

Monday, April 28, 2014

US markets ended the week on the back foot amid slowing earnings growth and general risk aversion over Russia. Benchmark indices pulled back on Friday as investors sold off growth stocks as valuation concerns were raised with the S&P 500 and DJIA closing 0.81% and 0.85% lower respectively. For the week ahead investors will be hoping earnings releases from energy giants Exxon Mobil, BP, Chevron and ConocoPhillips will encourage investors back to the market, seeking out value as participants rotate out of growth focused stocks. 

Asian markets turned lower during overnight trading as tensions escalated between Russia and the West. Most major benchmark indices struggled to hold on to Friday’s gains as the threat of sanctions against Russia prompted investors into a bout of short term profit taking. Risk aversion towards the end of last week saw the yen strengthen for the third straight session on Friday, as intraday dips saw the safe haven currency drop below 102.00 against the dollar. Activity overnight and early this morning has been relatively quiet as the yen remains underpinned by the 50 day MA at 102.40 ahead of the BOJ monetary policy meeting on Wednesday. Japanese retail sales were slightly stronger than expected with year-on-year growth of 11% in March against an expected 10.8% increase. However, market participants reacted with caution to the latest data ahead of April’s sales tax increase.

Three month LME nickel prices extended gains towards a 14-month high, trading above $18,700 for the first time since February last year as supply concerns supported the metal higher. Prices have rallied almost 18% since the start of the month, gaining in all but three of the last 18 sessions with levels around Friday’s close supporting nickel prices higher this morning. The imposition of sanctions on Russia by the US and EU could exacerbate the already tightening fundamentals after Indonesia’s export bank on unrefined ore earlier this year.  

Japanese retail sales increase 11% y/y in March

JNNETYOY Index Japan Retail Tra 2014 04 28 07 49 24

Three month LME nickel prices extend gains on supply concerns

LMNIDS03 Comdty LME NICKEL 3 2014 04 28 07 55 02 

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Topics: Equities, LME, Yen, Nickel
More from: Kash Kamal